D&L lays groundwork in fight for licenses

State lists two more in dumping case

May 16, 2013

YOUNGSTOWN - Lawyers for D&L Energy will continue to argue in a public hearing next week that the wrong company was penalized when Ohio's Division of Oil and Gas Management revoked the Salt Springs Road company's operating permits, according to documents filed Wednesday in Columbus.

In response to written questions from the Youngstown company's attorneys, officials from the Division admitted that D&L Energy had no unresolved violations pending against its saltwater injection wells when the company's permits were revoked in February.

The written questions were filed as an attachment to a pre-hearing brief from D&L attorneys Michael A. Cyphert and Bozana L. Lundberg of Cleveland.

The line of questioning from D&L attorneys appears to be setting the groundwork for the company's argument before the Oil and Gas Commission that D&L Energy should not be held responsible for the actions of its former president, Benedict Lupo, 62, of Poland, and Hardrock Excavating, a separate company previously operated by Lupo.

The chief of the Oil and Gas Division in February revoked all of D&L Energy's operating permits and denied its pending applications. The move came after Lupo was accused and eventually charged with directing an employee of Hardrock Excavating to dump oilfield waste into a storm drain on the property owned by D&L Energy. One of Lupo's employees, Michael Guesman of Cortland, also was charged. Guesman and Lupo each have pleaded innocent to violating the federal Clean Water Act.

Documents filed Wednesday for the first time publicly indicated that at least two other employees of Hardrock Excavating also were involved in the illegal dumping at 2761 Salt Springs Road, Youngstown. Those other men have not been charged criminally.

During its investigation of the dumping, the investigators with the division, which operates as an arm of the Ohio Department of Natural Resources, determined that D&L Energy had accepted brine hauled by Mohawk, an unlicensed hauler. That investigation led to the agency stripping D&L Energy of its permits to accept the brine and other oilfield waste at its six Ohio saltwater injection wells.

Following the incident, Lupo resigned as officer of the company, turning over his role to his wife, Holly Serensky Lupo. And since then, D&L Energy officials have been waging war against the state agency in an attempt to regain the company's injection well licenses.

A hearing is set for May 22 in Columbus before the Oil and Gas Commission, an impartial independent appeals board, that reviews decisions made by the division of Oil & Gas Resources Management.

Dozens of pages filed Wednesday by D&L Energy with the Oil and Gas Commission argue that "Ben Lupo was not acting on behalf of D&L Energy regarding the alleged disposal of brine into a storm sewer; nor can the chief punish D&L Energy for the alleged violations of Hardrock, Mohawk or their employees."

The attorneys for D&L also will argue that the chief has no authority under Ohio law to revoke the injection well permits and that D&L energy is not liable for any transporter registration certificate violation by Hardrock or Mohawk, the documents indicate.

The state agency has argued, however, that D&L violated the terms of its licenses when it accepted the brine from an unlicensed hauler.

In response to D&L's written questions, the agency refused to admit that D&L Energy is a separate corporate entity from Mohawk, and denied that D&L's pending permit applications were denied without any review of the merits of the applications.

The agency maintains that the three companies, D&L, Hardrock and Mohawk are "interrelated and operated as one business," and that "all employees listed share a common employer."